Halliburton was led from 1995 to 2000 by Vice President Dick Cheney, and it has been criticized since the beginning of the Iraq war for its large government contracts, some of them awarded without a bidding process.

Recently, the Army decided to pay KBR all but $9 million out of $222 million in disputed costs on a $2.4 billion contract to deliver fuel and repair oil equipment in Iraq.

The timing of the IPO was driven partly by rising values given to other engineering companies.

"Our decision to separate KBR arose primarily because we do not believe the full value of KBR is currently reflected in Halliburton's stock price, and few synergies exist between the two business units," said Halliburton spokeswoman Cathy Mann.

KBR, also known as Kellogg, Brown & Root, earned $240 million on sales of $10.14 billion last year, just a fraction of Halliburton's total profit of $2.36 billion on $21.01 billion in sales.

According to the Halliburton Web site, it acquired road builder Brown & Root in 1962. It gained M.W. Kellogg, which started as a pipe-fabrication business, in 1998 when it bought Dresser Industries.